Paper by Mathematics Prof. Zhixin Wu is Cited

August 15, 2014

A Bankrate analysis of equity-indexed annuities asks, "What exactly are these purported no-lose investments? Who's most likely to benefit by acquiring them? And what are the brokers not telling you during the free introductory dinner they often use to pitch their product?"

The piece by Jay MacDonald notes, "Lei Liang, a quantitative analyst at 40/86 Advisors in Carmel, Indiana, and Zhixin Wu, an associate professor at Indiana's DePauw University, co-authored a study published in the Journal of Financial Service Professionals in March that attempts to analyze the returns and risks of EIAs. 'It's not a good or bad product; it depends on your situation and time horizon,' Wu says. While a track record of barely 20 years isn't much to work with, Wu says the product's indexed exposure to the stock market tends to work for retirees and pre-retirees who won't need the money for years, and perhaps decades."